The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms to comply with the most recent stimulus law.
Congress approved the COVID-19 relief package in the month of March that included $284 billion of financing to small businesses that needed loans. This money was used to reduce the economic burden of the coronavirus epidemic. The legislation required that the SBA issue simplified forms within 24 hours after the bill’s passage into law. This was to simplify the process of applying for forgiveness. The legislation also contained conditions to encourage community banks to make more loans, especially to minority-owned businesses that had difficulty getting loans in the past.
“The Small Business Administration met the requirement to issue the single-page form for loan forgiveness under the PPP within 24 days of the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published more updated forms.”
First Draw PPP Conditions for loan forgiveness
Idr Student Loan Forgiveness – For eligible borrowers First Draw PPP loans are eligible to forgive loans. This happens when the loan is disbursed within an 8 to 24-week period.
- Employee and compensation levels are kept at a constant level.
- The loan proceeds can be used to pay for the cost of payroll as well as other expenses that are eligible.
- Minimum 60% of profits go towards payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans for eligible borrowers can be qualified for loan forgiveness if the loan is paid within an 8to 24 week time frame.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the identical manner.
- The loan funds are used on payroll expenses and other expenses that are eligible and
- A minimum of 60% of the profits go towards expenses for payroll
- What is the best time to apply for loan forgiveness
After all loan proceeds have been used The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time up to the date of maturity. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan are eligible to receive payment from their PPP lender.